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After the gold rush: The end of a golden age for China's mobile app market?

14 March 2016

Hogan Lovells

China has finally made a move to regulate the smart mobile devices applications ("Mobile Apps") industry, which has been on fire for many years but has experienced certain "growing pains". This move may signal the end of the "gold rush era" for China's Mobile App market and usher in a more orderly and regulated market environment.

On 18 November 2015, the Ministry of Industry and Information Technology ("MIIT") released the Pre-installation and Distribution of Applications for Smart Mobile Devices Interim Administrative Provisions (Draft for Public Comments) (the "Consultation Draft"), the purpose of which is to regulate the pre-installation and distribution of Mobile Apps in China. The public consultation period ended on 18 December 2015 and the final rules are expected to be released soon.

Despite MIIT's proposals as early as 2012 that all Mobile Apps to be released in China would first have to be submitted to the MIIT for approval, the Consultation Draft does not go so far as to mandate a registration and approval system. However it does aim to bring independently-developed Mobile Apps within the regulated scope by establishing a real-names registration system for independent developers. It also imposes a requirement to meet China's standards with respect to all Mobile Apps.

This note provides an overview of the key obligations imposed on industry participants in the Mobile App sector under the Consultation Draft and analyses a number of such obligations and their potential implications, including the following:

1. Mobile Apps must meet China's standards;

2. the need to look beyond the Consultation Draft for requirements on the protection of personal information;

3. a question as to whether the proposed administrative obligations placed on manufacturers and app store/platform operators might work in practice in terms of managing Mobile App developers and other industry players; and

4. "lacunae" under the Consultation Draft.

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